ETHOS Limited Result Update Presentation 4Q&FY17 Safe Harbor - - PowerPoint PPT Presentation

▶
ethos limited
SMART_READER_LITE
LIVE PREVIEW

ETHOS Limited Result Update Presentation 4Q&FY17 Safe Harbor - - PowerPoint PPT Presentation

Dec 08, 2023 221 likes •522 views

KDDL Limited ETHOS Limited Result Update Presentation 4Q&FY17 Safe Harbor This presentation and the accompanying slides (the Presentation), which has been prepared by KDDL Limited (the Company), solely for information purposes

slide-1
SLIDE 1

KDDL Limited ETHOS Limited

Result Update Presentation 4Q&FY17

slide-2
SLIDE 2

This presentation and the accompanying slides (the “Presentation”), which has been prepared by KDDL Limited (the “Company”), solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe for any securities, and shall not form the basis or be relied on in connection with any contract or binding commitment whatsoever. No

  • ffering of securities of the Company will be made except by means of a statutory offering document containing detailed

information about the Company. This Presentation has been prepared by the Company based on information and data which the Company considers reliable, but the Company makes no representation or warranty, express or implied, whatsoever, and no reliance shall be placed on, the truth, accuracy, completeness, fairness and reasonableness of the contents of this Presentation. This Presentation may not be all inclusive and may not contain all of the information that you may consider material. Any liability in respect of the contents of, or any

  • mission from, this Presentation is expressly excluded.

Certain matters discussed in this Presentation may contain statements regarding the Company’s market opportunity and business prospects that are individually and collectively forward-looking statements. Such forward-looking statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and assumptions that are difficult to predict. These risks and uncertainties include, but are not limited to, the performance of the Indian economy and of the economies of various international markets, the performance of the industry in India and world-wide, competition, the company’s ability to successfully implement its strategy, the Company’s future levels of growth and expansion, technological implementation, changes and advancements, changes in revenue, income or cash flows, the Company’s market preferences and its exposure to market risks, as well as other risks. The Company’s actual results, levels of activity, performance or achievements could differ materially and adversely from results expressed in or implied by this Presentation. The Company assumes no obligation to update any forward- looking information contained in this Presentation. Any forward-looking statements and projections made by third parties included in this Presentation are not adopted by the Company and the Company is not responsible for such third party statements and projections.

Safe Harbor

2

slide-3
SLIDE 3

Financial Overview

slide-4
SLIDE 4

Financial Highlights

4

  • 1.10
  • 3.26

Q4FY17 Q4FY16

  • 3.47
  • 7.11

Q4FY17 Q4FY16

Losses reduced by 66%

EBITDA (Rs. Cr)

Losses reduced by 51%

PAT (Rs. Cr) Ethos – Q4FY17 vs Q4FY16 KDDL – Q4FY17 vs Q4FY16

5.00 6.03 Q4FY17 Q4FY16

Consistent operating performance reduced the losses considerably

EBITDA (Rs. Cr)

1.67 2.57 Q4FY17 Q4FY16

PAT (Rs. Cr)

Business impacted by lower revenue and change in product mix coupled with strategic investments made for capturing future growth

slide-5
SLIDE 5

Moving up the Value Chain

5

Forayed in Watch Retailing Started as a Watch Components Manufacturer The Largest & Preferred Retailer of Swiss Watches in India

slide-6
SLIDE 6

6

Ethos’ Strategic Partnerships with Swiss Watch Brands

Ethos to be Exclusive Retailer for Nomos Glashutte Watches in India Ethos to be Exclusive Supplier

  • f Oris Watches to BMW

Williams Formula One Team Consistent Brand Additions in the portfolio and Exclusivity with us fetches higher margin and eventually improve sales

slide-7
SLIDE 7

Ethos is India’s Preferred Destination for Luxury Watches

7

Knowledge

Ethos has well trained Knowledgeable staff to ensure highest customer satisfaction and increasing repeat buying.

Online

Ethos makes Swiss Watches ‘Available Online’ in a confluence of Online-Offline model helping us to leverage the strength of Swiss Watch Brands and our wide Distribution Reach

One-stop shop

Ethos’ access to Swiss Watch Brands will make it a ‘1 Stop Shop’ for Luxury Watches In India

Trust

Ethos DNA is all about Authenticity increasing the ‘Trust factor’ in a large Un-

  • rganized market.

Mind Share

Ethos to be synonymous with Luxury watches retailing in India thus gaining ‘Customer Mind Share ‘

slide-8
SLIDE 8

8

PAN Card Regulation : Adapting to Change

‘Refining’ Product Mix Strategy

  • Expect longer time to accept
  • Reducing exposure
  • Expect gradual acceptance
  • Maintain lean inventory
  • Witnessing faster acceptance
  • Leading to Limited Impact
  • Outside purview of the

Regulation

With effect from 1st January, 2016, Income Tax department made it mandatory to quote Permanent Account Number (PAN) for all transactions of amount exceeding Rs. 2 lakh, irrespective of mode of payment.

slide-9
SLIDE 9

PAN Card Regulation : Benefits in the long run

9

CUSTOMER PROFILING

  • Better profiling as customer are more open to sharing demographic information
  • Creating tailor-made offering for targeting by segment
  • Influencing buying behaviour of prospective customers

BETTER SERVICE to EXISTING CUSTOMERS

  • Proactively and consistently engage with customers
  • Make Customer feel valued

LEVEL PLAYING FIELD

  • Responsibility of compliance lies on retailer
  • Leading to a curb on grey practices
slide-10
SLIDE 10

Asset Light Model...

10

Focus on Online Presence & Rationalize Store Presence Reduce Front-End Cost like Manpower and Rental expenses

Improve Return On Capital Employed

Expand catchment area of offline store, leading to higher revenue

Minimize Investment Maximize Reach Operating Leverage Playing Out

slide-11
SLIDE 11

Financial Overview

slide-12
SLIDE 12

P&L– FY17

12

  • Rs. Crs

Consolidated* Standalone Ethos FY17 FY16 YoY % FY17 FY16 YoY % FY17 FY16 YoY % Revenue 455.4 449.8 1% 125.6 119.0 6% 326.2 328.7

  • 1%

Cost of Goods Sold 283.0 276.8 28.7 26.0 253.8 250.5 Gross Profit 172.4 173.0 0% 96.9 93.0 4% 72.4 78.1

  • 7%

Employee Expenses 60.5 57.0 39.5 36.6 20.4 20.2 Other Expenses 84.9 86.4 35.7 35.6 48.1 50.7 EBITDA 26.9 29.5

  • 9%

21.7 20.8 4% 4.0 7.3

  • 45%

Margin (%) 5.9% 6.6% 17.2% 17.5% 1.2% 2.2% Other Income 3.2 4.6 2.2 2.0 0.3 0.1 Interest 14.4 15.0 5.5 6.2 7.9 8.2 Depreciation 11.7 11.2 7.3 6.9 3.8 3.8 PBT 4.1 7.9

  • 48%

11.1 9.7 14%

  • 7.5
  • 4.6

Tax 4.0 3.7 4.0 3.1 0.0 1.3 PAT 0.1 4.2

  • 88%

7.2 6.6 9%

  • 7.5
  • 5.9

PAT After MI 0.6 5.3 7.2 6.6

  • 7.5
  • 5.9

Cash PAT 12.3 16.5 14.4 13.5

  • 3.7
  • 2.2

* Consolidated Results include Standalone, Ethos Ltd and other subsidiaries

slide-13
SLIDE 13

Ethos Balance Sheet

13

  • Rs. Crs

Mar-17 Mar-16 Shareholder’s Fund 65 57 Share Capital 36 32 Reserves & Surplus 29 25 Non-current liabilities 12 11 Long Term borrowings 11 10 Long Term Provisions 1 1 Current liabilities 135 140 Short Term Borrowings 51 54 Trade Payables 65 69 Other Current liabilities 19 16 Short Term Provisions 1 1 Total Liabilities 211 208 Non-current assets 25 26 Fixed Assets 10 13 Long Term loans and advs. 15 13 Other Current Assets 1 Deferred Tax Asset Current assets 187 182 Inventories 167 164 Trade Receivables 5 6 Cash and Bank Balances 10 6 Short Term Loans and Advances 5 6 Total Assets 211 208

slide-14
SLIDE 14

Consolidated Balance Sheet

14 * Consolidated Results include Standalone, Ethos Ltd and other subsidiaries

  • Rs. Crs

Mar-17 Mar-16 Shareholder’s Fund

102

82 Share capital

11

10 Reserves & Surplus

88

72 Money received against share warrants

3

  • Minority Interest

35

34 Non-current liabilities

51

43 Long term borrowings

40

33 Deferred Tax Liabilities

4

3 Other Long Term Liabilities

3

3 Long Term Provisions

3

4 Current liabilities

172

183 Short term borrowings

59

68 Trade Payables

72

78 Other current liabilities

36

34 Short term provisions

3

3 Total Liabilities 358 341 Non-current assets

107

104 Fixed assets

84

82 Non Current Investments

1

1 Long-term loans and advs.

22

21 Other Non Current Assets 1 Current assets

251

238 Inventories

188

185 Trade receivables

30

26 Cash and bank balances

21

12 Short-term loans and advs.

12

14 Total Assets 358 341

slide-15
SLIDE 15

328.7 281.0 219.8 326.2 173.3 FY16 FY17 FY13 FY15 FY14

Revenue (Rs.Crs)

FY16 FY17 11.4% 13.4% 13.7% FY15 FY14 11.7% 11.7% FY13

Front-end Rent & Manpower Cost as % of Revenue

Ethos Performance Trend – FY17

15

EBITDA Margin (%)

4.0 7.3 14.3 8.8 7.8 FY13 FY14 FY15 FY16 FY17

EBITDA (Rs.Crs)

Continuously gaining market share despite near term challenges

1.2% FY14 4.5% 5.1% 4.0% FY15 FY13 FY16 FY17 2.2%

slide-16
SLIDE 16

116.0 113.6 76.3 40.5 17.8 FY13 FY17 FY16 FY15 FY14 +2% 31.8% 30.7% 24.2% FY15 16.4% FY13 FY17 FY14 FY16 9.6% +110bps 10,001 7,887 5,901 3,191 1,322 FY15 +27% FY14 FY17 FY16 FY13

Online Billing (Rs. Crs) Online – as % of Total Billing Visitors on website (‘000)

Ethos Online Sales Trend– FY17

16

slide-17
SLIDE 17

Ethos Repeat Sales Trend – FY17

17

1,54,357 1,24,777 91,705 Mar’17 Mar’16 Mar’15 70.8 68.6 61.4 FY17 FY16 FY15

Club ECHO – Member Base Repeat Billings (Rs.Crs)

slide-18
SLIDE 18

Pan-India Presence with Offline Store Network

18

India’s Largest retail chain of Luxury Watches with 35 stores Presence across Metros, Tier I, Tier II cities Store Selection Criteria : Reputed /Pedigree Mall at Premium location where other Premium brands present and having better facility management 2 Duty Paid Retail Outlets at Domestic Terminals 2 Duty Free Retail Outlets at International Terminals

Ludhiana Chandigarh Gurgaon New Delhi Ahmedabad Bhopal Nagpur Mumbai Hyderabad Bengaluru Chennai Thane Noida Maps not to scale. All data, information, and maps are provided "as is" without warranty or any representation of accuracy, timeliness or completeness

slide-19
SLIDE 19

Continued Investments in Advertising

19

… with ETHOS co-branding Print Ads on The Economic Times Front Page

slide-20
SLIDE 20

Continued Investments in Advertising

20

… with ETHOS co-branding Print Ads on The Times of India Front Page

slide-21
SLIDE 21

TRUST CAMPAIGN across channels

21

… To Reinforce our “ETHOS” … to Educate consumers about Watches … to Create Awareness about unscrupulous activities

slide-22
SLIDE 22

Company Overview

slide-23
SLIDE 23

Stable Manufacturing Business

▪ Leading supplier of premium watch components - watch dials and watch hands ▪ Caters to demand from international brands in Switzerland & India ▪ Engaged in manufacturing of

  • f High Precision Stamping

Parts & Precision & Progressive Tools ▪ CAGR of 6% over FY13 – FY17

Scalable Retail Business - ETHOS

▪ India’s Largest Retail Chain of Luxury Watch Studios ▪ Authorized retailer of over 60 luxury watch brands, ranging from Rs. 5,000 to more than Rs.20,00,000 ▪ 35 premium watch boutiques across country ▪ CAGR of 17% over FY13 - FY17 ▪ 73.60% subsidiary of KDDL Ltd on a fully diluted basis

Business Overview

23

73% 27%

*Figures updated as on date

slide-24
SLIDE 24

Expanding Precision Engineering Business...

24

Setting up Greenfield Facility at Bengaluru, Karnataka Building New capabilities

  • Injection Molding
  • CNC Machining
  • Plating

Manufacture high quality precision stamped components, progressive tools and sub-assemblies to cater to high- growth high margin industries ~2 acre land allotted in EOU zone near Bengaluru Airport Investing Rs. 30 Crs

  • ver 2 years with

2:1 debt funding Expected to commence operations by Q2 FY18

… to emerge as “Strong Player” in Organized space

Financial Closure has been achieved & project is proceeding as per schedule

slide-25
SLIDE 25

Stable Manufacturing Performance

25

FY13 FY14 FY15 FY16 FY17

Revenue (Rs.Crs)

12 21 25 21 22

13% 19% 20% 17% 17%

  • 2%

3% 8% 13% 18% 23% 5 10 15 20 25 30

FY13 FY14 FY15 FY16 FY17

EBITDA (Rs.Crs)

96 112 127 119

CAGR + 7% CAGR + 16%

126

slide-26
SLIDE 26

Scaling-Up Retail Performance

26

157 184 213 228 222

17 36 68 101 104

FY13 FY14 FY15 FY16 FY17

Offline Online

17.3% 17.9% 16.1% 16.9% 16.7% 9.6% 8.9% 9.6% 7.0% 5.5%

5.0% 6.0% 7.0% 8.0% 9.0% 10.0% 12.0% 14.0% 16.0% 18.0%

FY13 FY14 FY15 FY16 FY17 Front End expenses as % of Sales EBITDA Margin before Central Expenses

Increasing Online Revenue... ... Improved Absorption of Fixed Expenses

  • Rs. Crs
slide-27
SLIDE 27

Historical Financial Highlights

slide-28
SLIDE 28

Consolidated – Profit & Loss Statement

28

Rs.Crs FY17 FY16 FY15 Revenue 455.4 449.8 411.7 Other Income 3.2 4.6 2.0 Total Revenue 458.6 454.4 413.7 Cost of Goods Sold 283.0 276.8 239.6 Employee Expenses 60.5 *57.0 58.3 Other Expenses 84.9 86.4 74.7 EBITDA 26.9 29.5 39.0 EBITDA Margin 5.9% 6.6% 9.5% Interest 14.4 15.0 15.3 Depreciation 11.7 11.2 11.8 PBT 4.1 7.9 13.9 Tax 4.0 3.7 5.0 PAT After MI 0.6 5.3 8.8 PAT after MI Margin 0.1% 1.2% 2.1% Cash PAT 12.3 16.5 20.6 Cash PAT Margin 2.7% 3.7% 5.0%

* Employee Expenses include additional bonus provision impact of Rs. 1 Cr for the year pursuant to amendment in Payment of Bonus Act, 1965

slide-29
SLIDE 29

For further information, please contact:

Contact

29

Company : Investor Relations Advisors : KDDL Limited CIN : L33302HP1981PLC008123

  • Mr. C. Raja Sekhar

rajasekhar@ethoswatches.com www.kddl.com / www.ethoswatches.com Strategic Growth Advisors Pvt. Ltd. CIN : U74140MH2010PTC204285

  • Mr. Shogun Jain/ Ms. Sanghamitra Karak

+91 7738377756 / +91 9833692935 shogun.jain@sgapl.net / sanghamitra.karak@sgapl.net www.sgapl.net